NorthWestern Energy Group, Inc. (NWE) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary and Q&A session reveal a generally positive outlook. The increase in quarterly dividend and improved EPS despite mild weather and higher expenses indicate strong financial management. The company's strategic focus on data centers and the South Dakota plant, along with the merger, suggests growth potential. Although there are some uncertainties regarding environmental regulations and ESA delays, the overall sentiment is positive, supported by a market cap of $3.06 billion, likely resulting in a positive stock price movement of 2% to 8% over the next two weeks.
Key Financial Performance
GAAP diluted EPS $2.94, impacted by merger-related costs, regulatory outcomes in Montana, and a warm fourth quarter.
Non-GAAP diluted EPS $3.58, reflecting a 5.3% growth over 2024, despite headwinds such as PCCAM impacts, higher property taxes, and mild weather.
Quarterly dividend Increased by 1.5% to $0.67 per share.
Fourth quarter adjusted EPS $1.17, improved margin due to new rates and regulatory execution, offset by mild weather, higher operating costs, and depreciation.
Weather impact Unfavorable by $0.05 for the year and $0.03 for the quarter, with a significant reversal from favorable weather in Q1 to mild weather in the back half of 2025.
PCCAM impact $0.09 detriment for the year, reflecting regulatory changes and cessation of sharing amounts.
Depreciation expense Increased by $0.27 year-over-year due to new maintenance and investments.
Interest expense Increased by $0.23 year-over-year.
Tax benefits $0.12 benefit in 2025 compared to $0.39 in 2024, contributing to year-over-year changes.
Capital plan Updated to $3.21 billion, a 17% increase over the prior plan, driven by new projects like the 131-megawatt South Dakota facility and incremental Colstrip ownership.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
South Dakota Natural Gas Project: Submitted a $300 million or 131-megawatt project to SPP's expedited resource adequacy study and included it in the ongoing capital plan.
Acquisition of Assets: Acquired Energy West and Cut Bank Gas natural gas distribution assets.
Data Center Growth: Signed a third letter of intent with Quantica for a 500-plus megawatt data center and progressed with Sabey from a letter of intent to a development agreement.
Colstrip Ownership: Increased ownership from 15% to 55% by acquiring Avista and Puget interests, enabling resource adequacy and large-load customer service.
Regulatory Approvals: Received approval for wildfire plan from Montana Commission and completed Montana Electric and Natural Gas general rate reviews.
Legislative Outcomes: Montana Senate Bill 301 and House Bill 490 were signed into law, supporting transmission investment and limiting wildfire-related risks.
Merger with Black Hills Corporation: Announced an all-stock Merger of Equals, expected to close in the second half of 2026, with joint requests for approval filed in multiple states and FERC.
Capital Plan Update: Updated 5-year capital plan to $3.21 billion, a 17% increase over the prior plan, including new projects and acquisitions.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Merger-related costs: The company incurred $0.15 per share in merger-related costs in 2025, which impacted financial performance and added to operational expenses.
Montana rate review disallowance: A $0.38 per share disallowance related to the Yellowstone County Generating Station was noted, with no clear timeline for reconsideration, creating financial uncertainty.
Weather impact: Unfavorable weather conditions in 2025 led to a $0.18 detriment compared to normal weather, significantly affecting margins and cash flows.
Higher operating costs: Increased operating costs were driven by new maintenance requirements, wildfire mitigation efforts, insurance, and labor and benefits expenses.
Depreciation and interest expenses: Higher depreciation and interest expenses negatively impacted financial results.
Property tax increases: Significant property tax increases were only partially recoverable through rates, creating financial strain.
South Dakota generation investment: The inclusion of a 131-megawatt South Dakota generation facility in the capital plan will require equity issuance beyond 2026, impacting financial planning.
Data center challenges: Delays and land issues with data center projects, such as Sabey, and dependency on legislative changes like South Dakota's sales tax reform, pose risks to project timelines and revenue generation.
Colstrip operating costs: Incremental annual operating costs of $18 million for the Avista portion and $30 million for the Puget portion require regulatory approvals for cost recovery, creating financial uncertainty.
Lower FFO to debt ratio: The company closed 2025 with a lower FFO to debt ratio due to mild weather and under-collection of supply costs, impacting financial stability.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
2026 Earnings Guidance: The company is initiating earnings guidance in the range of $3.68 to $3.83 per share, representing 5% growth at the midpoint off of 2025 results.
5-Year Capital Plan: The updated capital plan is set at $3.21 billion, a 17% increase over the prior plan, including the 131-megawatt South Dakota generating facility and incremental Colstrip ownership.
Merger with Black Hills Corporation: The merger is anticipated to close in the second half of 2026. Joint applications for approval have been filed in Montana, Nebraska, and South Dakota, with hearings expected in Q2 2026. Shareholder votes are scheduled for April 2, 2026.
Data Center Development: Progress is being made with data center agreements, including moving from letters of intent to development agreements with Atlas Power and Sabey. At least one Energy Service Agreement (ESA) is expected to be completed by Q2 2026.
Colstrip Ownership: The company has increased its ownership in Colstrip to 55%, providing strategic control and the ability to serve large-load customers. Temporary cost recovery measures have been filed and are expected to offset operating costs.
South Dakota Sales Tax Reform: Sales tax reform in South Dakota is being monitored as it is critical for data center development in the state.
Financing Plan for 2026: The company expects to issue debt to refinance existing maturities and fund the capital plan. Equity issuance beyond 2026 is anticipated for the South Dakota generation investment.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
Quarterly Dividend Increase: The company announced an increase in its quarterly dividend by 1.5% to $0.67 per share.
Dividend Yield: The dividend yield is approximately 4%, which is a change from the previous range of 4% to 5%.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:Can you update us on the timing and scope of the large-load tariff filing for new data center loads?
A:The large-load tariff filing is tied to signing an ESA (Energy Service Agreement). The company plans to file the tariff once an ESA is signed, which is expected by the end of the second quarter. The tariff is ready to go, and the filing will demonstrate that data centers pay their fair share and contribute to system benefits.
Q:Can you provide an update on the education plan for stakeholders regarding data center costs and affordability?
A:The company has been engaging in public discussions, particularly in Montana, to educate stakeholders about the benefits of data centers. They aim to demonstrate that data centers contribute positively to the grid and protect customers through a transparent tariff process. Progress has been made with data centers like Sabey, Atlas, and Quantica.
Q:What is causing delays in signing ESAs with data centers, and how do you plan to address them?
A:Delays are partly due to land issues faced by developers like Sabey and the need for developers to secure customers before signing ESAs. The company acknowledges its own past delays but is now ready to proceed. They are confident in their progress with Sabey, Atlas, and other providers.
Q:How does the company plan to offset share dilution while maintaining a 4%-6% EPS CAGR?
A:The company plans to invest in incremental opportunities like the South Dakota plant, which allows cash recovery during construction and is accretive to earnings. They will fund such projects with a 50-50 equity approach and maintain disciplined capital planning to support growth.
Q:What is the strategy for ESA and tariff implementation for data centers?
A:The strategy involves implementing ESAs and tariffs in tandem to protect customers and ensure data centers pay their fair share. Each data center's needs are site-specific, and the company aims to maintain transparency with regulators and the public.
Q:What is the timeline and status of the South Dakota plant?
A:The South Dakota plant is under construction, with turbines expected to be purchased in 2026. The plant is scheduled for completion in 2030.
Q:What is the company's plan if the EPA's endangerment finding is reversed, and what is the status of environmental upgrades at Colstrip?
A:The company plans to keep Colstrip operational as long as it is economic, potentially investing in gas plants if required. The current 5-year capital plan includes maintenance CapEx for Colstrip but no material environmental CapEx. They are awaiting updates from the EPA on potential rules.
Q:What is the status of the remaining ownership of Colstrip and potential divestitures?
A:The company recently acquired additional ownership from Puget and Avista, reaching 55% ownership. They are satisfied with this level and are monitoring how other owners may exit due to state laws.
Q:Are there any concerns about delays in the regulatory review of the merger in South Dakota and Montana?
A:There are no major concerns. South Dakota requires more time for procedural schedules, but it is expected to progress ahead of Montana. The Montana review is proceeding as expected, with typical concerns raised by intervenors.
Q:Does the IRP process impact the merger review timeline?
A:The IRP process does not impact the merger review timeline. The IRP is already out, and there is no connection between the two processes.
Q:Review of Unclear Management Responses
A:Management avoided providing a direct answer regarding the potential environmental upgrades at Colstrip if the EPA's endangerment finding is reversed. They stated they would do what is necessary but did not provide specific details or commitments. Additionally, they did not clarify the exact implications for other Colstrip owners if they are forced to exit due to state laws.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Bill law
Black Hills
County Generating
Dakota generation
Gas
Meyer
NorthWestern Energy
PCCAM mechanism
Weather weather
Yellowstone County
adjustment
basis capital
capital plan
charge Montana
date
development agreement
disallowance
equity basis
financials
financing plan
front Montana
generation investment
headwind
increase
interest expense
investment debt
maintenance
merger
number
outcome front
property tax
rate case
self
tax benefit
wildfire
NWE Transcript
NorthWestern Energy Group, Inc. (NWE) Q4 2025 Earnings Call Transcript
Positive2-12
The earnings call summary and Q&A session reveal a generally positive outlook. The increase in quarterly dividend and improved EPS despite mild weather and higher expenses indicate strong financial management. The company's strategic focus on data centers and the South Dakota plant, along with the merger, suggests growth potential. Although there are some uncertainties regarding environmental regulations and ESA delays, the overall sentiment is positive, supported by a market cap of $3.06 billion, likely resulting in a positive stock price movement of 2% to 8% over the next two weeks.
NorthWestern Energy Group, Inc. (NWE) Q3 2025 Earnings Call Transcript
Unknown10-30
The earnings call reveals several concerns: regulatory risks, merger-related costs impacting earnings, and operational cost increases. While there are positive aspects like non-GAAP EPS improvement and dividend declaration, the overall sentiment is negative due to uncertainties in regulatory approvals, market impacts, and vague management responses in the Q&A. The market cap indicates a moderate reaction, leading to a predicted negative stock movement of -2% to -8% over the next two weeks.
NorthWestern Energy Group, Inc. (NWE) Q2 2025 Earnings Call Transcript
Unknown7-31
The earnings call summary indicates several concerns: a decline in EPS, regulatory uncertainties, and financial risks related to wildfire liabilities. Despite a strong dividend yield, these issues, combined with management's unclear responses in the Q&A session, suggest a negative sentiment. The market cap indicates a moderate sensitivity, leading to a projected stock price movement of -2% to -8%.
Earnings call transcript: NorthWestern beats EPS, stock dips Q1 2025
Unknown4-30
The earnings call summary presents a mixed outlook. Financial performance showed improvement, with increased EPS and stable dividends, but there are uncertainties in legislative risks, supply chain challenges, and competitive pressures. The Q&A session highlighted management's uncertainty regarding tariff proceedings and EPS guidance. Despite a strong dividend yield and growth projections, potential risks and lack of clarity in guidance offset the positive financial metrics, leading to a neutral sentiment. Considering the company's market cap, the stock price is likely to remain stable within a -2% to 2% range over the next two weeks.
NWE Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
